Obama's broken promise on taxes
During the presidential campaign, Barack Obama tempered his pledge to substantially raise taxes for high earners with an important proviso: He'd simply restore rates to their levels during the Clinton Administration. The implication was that families in the upper brackets would see their total tax bite go back to the levels of the 1990s, but no higher.By limiting deductions for these people he is raising their tax bill beyond the increase in rates. Obama is also effecting the incomes of those who provide goods and services to these people since he is taking money that they would have spend on furniture, appliances and autos as well as vacations.
Now, it sure looks like Obama is reneging on that promise. The burden will indeed go far higher than in the Clinton years via a technicality -- one that will come as a rude shock even to the taxpayers already braced for a soaking.
The group that's hit hardest are the taxpayers I call the HENRYs, for "High Earners Not Rich Yet." The HENRYs are families who make between $250,000 and $500,000 a year. I wrote about the HENRYs in a Nov. 17 Fortune cover story, "Who Pays for the Bailout?" They're among America's most productive, hard-working citizens: our doctors, attorneys, architects, and entrepreneurs, the owners and builders of cleaning companies, delis and security franchises. (Read the original HENRY story here.)
Though President Obama brands them as rich, they're usually far from it. "Rich" means personal wealth, or net worth, not income. These HENRYs are already strapped by a combination of high income taxes, soaring property tax levies, and college savings for the kids. Their chance of accumulating the couple of million dollars needed to qualify as rich were virtually nil even before Obama took the stage.
While Obama is doing his moral preening and looking down his nose at business and people who go to resorts, there is a whole industry whose livelihood depends on customers from people like this. The Democrats are making the same mistake they made with the luxury tax in the 90s that put the yacht builders out of business.